EFFECTS OF GOVERNMENT ORDERS ON 7 TH CPC FOR ARMED FORCES - - PowerPoint PPT Presentation

EFFECTS OF GOVERNMENT ORDERS ON 7TH CPC FOR ARMED FORCES’ PENSIONERS

Sequence of Presentation

• Categories of Pensioners as on Today
• Notional Pay Method Vs 2.57 Method
• IOR and its Effect on Pay & Pension of Serving

Officers and Post – 2016 Pensioners

• Disability Element w.e.f Jan 2016
• Loss of Pension and Disability Element, War

Injury Element to Army Cdrs & their Equivalents

• Defence Pay Matrix & Consequent Loss in Pay &

Pensions

• Q & A

LATEST C & AG REPORT

• Based on test check for one month, cases of

21,434 Defence pensioners were identified who

were underpaid, amounting to Rs 106 crore. Major reasons for underpayments were

• Non-revision/ incorrect revision of pensions
• Non-restoration of commuted portion of

pension

• Wrong revision of disability element.
• Non-revision of fixed medical allowance

CATEGORY OF PENSIONERS

Category of Officer Pensioners Period Description Pre – 2012 All those who got Enhanced Pension due to OROP w.e.f July 2014 2013 Those who Retired in calendar year 2013 2014 – 2015 Those Beyond OROP Period Post – 2016 Retired on or after Jan 2016

Pensions

Pension of Various Categories of Pensioners Type of Pensioner Pension as on Today Pre – Jan 2013 (OROP Beneficiaries) = OROP x 2.57; Colonel, 30 Years’ Service = 2.57 x 36,130 = Rs 92,854 + DR @ 5% Calendar Year 2013 2.57 x Pension + DR @ 5% > Rs 92,854

Observation on Pension of Later Retiree : Officers

• Pension of Brig with 33 or more years of service retired

prior to Jan 2013 - Rs 37,570 in OROP (Circular 555)

• Rs 37,570 is Average of Maximum and Minimum

Pension of Brig / Cmde / Air Cmde who Retired in Calendar Year 2013 with Qualifying service of 33 years

• r more
• OROP is Average.
• Maximum Pension in 2013 Cmde = Rs 38,250
• Minimum Pension in 2013 Air Cmde = Rs 36,890
• Average for Pre – 2013 Brig, 33 Years’ service

= Rs 37,570

Pension of Various Categories of Pensioners

Type of Pensioner Pension as on Today 2014 – 2015 Pensioners 2.57 x Pension Post – 2016 Pensioners 2.57 x Pay to be seen in Def Pay Matrix. Find next Higher figure for the Rank. Add MSP of Rs 15,500 to the Matrix . Half is Pension

Pension of Various Categories of Pensioners

Type of Pensioner Pension as on Today Colonel Retired in Jan 2016 with 30 Years of Service with say PIPB of Rs 60,000 (6th CPC) = 2.57 x (PIPB 60,000 + GP 8,700) = Rs 1,76,559 Next higher figure in DPM i.e. Rs 1,80,800 Add MSP of Rs 15,500. Pension = 0.50 (180800+15500) = Rs 98,150 + DR @ 5%

Pension Of Pre – 2016 Pensioners

Pension of Pre – 2016 Pensoiners

 2.57 Method  Notional Pay Method

Illustrations Given in Min of Def Letter Dt 05 Sep 2017

Pension Fixation By 2.57 Method of Pre – 2016 Pensioners

2.57 Method of Pension Fixation

Description Lt Col Brig Date of Retirement 07 Sep 1999 (5 CPC) 31 May 2014 (6 CPC) Qualifying Service 22 Yrs 02 Months 34 Yrs 11 Months Pay Scale at the Time of Retirement Rs 13,500 – 400 – 17,100 + RP 1,600 Rs 37,400 – 67,000 + GP Rs 8,900 + MSP Rs 6,000

2.57 Method of Pension Fixation Description Lt Col Brig

Pay on

Retirement

Rs 15,100 + RP of Rs 1,600 (earned 4 increments of Rs 400 from Rs 13500) RE = PIPB of Rs 63,150 + GP of 8,900 + MSP 6000

Pension on 31 Dec 2015 Before Revision Rs 32,428 (OROP) Circular 555 50% of Reckonable Emoluments = 0.50 x(63150 + 8900 +6000) = Rs 39,025 > 37570

2.57 Method of Pension Fixation Description Lt Col Brig Pension by 2.57 Method Rs 32428 x 2.57 = Rs 83,340 39025 x 2.57 = Rs 1,00,295 The Officer who retires later will always have higher pension

Notional Pay Method of Pension Fixation of Pre – 2016 Pensioners

• In Simple Terms it is

Enhancing Actual Pay of those Retired in 3rd or 4th or 5th or 6th CPC to the level of Notional Pay in Dec 2015 by Multiplication Factors at each

• f the CPCs.

• If Retired in 3rd CPC
• His Notional Pay as in Jan 1986 in 4th CPC.
• His Notional Pay as in Jan 1996 in 5th CPC.
• His Notional Pay as in Jan 2006 in 6th CPC.
• His Notional Pay in 7th CPC = 2.57 x

(Notional Pay in 6th CPC) + MSP of Rs 15,500

• Pension = 50% of Notional Pay + DR + Old

Age Pension for those above 80 years of age

Notional Pay Method

Rank Lt Col Date of Retirement & Actual Pay in 3rd CPC 31 May 1976 (3rd CPC) Three Increments at the time of Retirement Notional Basic Pay in 4th CPC (Min Pay Rs 3900 + 3 x Rs 150 = Rs 4,350) Rs 4,350 (Integrated Pay Scale of Rs 2300 – 100 – 3900 – 150 – 5100 Notional Basic Pay in 5th CPC (Jan 1996) – Equal to Rs 4350 in 4th CPC Rs 13,900 (pay scale of 13500 – 400 – 17100) as per SAI 1/S/1998

Lt Col Retire in Sep 1999 with 22 Years of Service 4th CPC 5th CPC 6th CPC Basic Pay of Rs 4,350 + Rank Pay of Rs 800 at time

• f Retirement

in 1989 Basic Pay = Rs 4350 Rank Pay = 800 DA @ 111%= 5717 IR – I = 100 IR – II @10%= 510 40% Fitment= 2060 Total = Rs 13,587 New Basic is Rs 13,900 in 5th CPC scale of Rs 13,500 – 400 – 17,100 SAI 2/S/2008 corresponding to 5th CPC Basic pay of Rs 13900 is in 6th CPC as per SAI 2/S/2008: Rs 38,530 (PIBP) Rs 8,000 (GP) Rs 6,000 (MSP

Notional Pay Method Rank Lt Col Notional Pay in 6th CPC (Jan 2006) for 5th CPC pay of Rs 13,900 Rs 38,530 (given in SAI 2 / S / 2008) Notional Pay in Jan 2016 2.57 x (38530 + 8000) = 1,19,582 Next higher figure in Def Pay Matrix is Rs1,21,200

Notional Pay Method Rank Lt Col Notional Pay in 7th CPC (Jan 2016) Matrix pay of Rs 1,21,200 + MSP of Rs 15,500 = Rs 1,36,700 Pension by Notional Pay Method Pension by 2.57 Method = 0.50 x 136700 = Rs 68,350 Rs 83,340

Illustrations Given in Min of Def Letter Dt 05 Sep 2017

Notional Pay Method of Pension Fixation

Description Lt Col Brig Date of Retirement 07 Sep 1999 (5 CPC) 31 May 2014 (6 CPC) Qualifying Service 22 Yrs 02 Months 34 Yrs 11 Months Pay Scale at the Time of Retirement Rs 13,500 – 400 – 17,100 + RP 1,600 Rs 37,400 – 67,000 + GP Rs 8,900 + MSP Rs 6,000

Notional Pay Method of Pension Fixation Description Lt Col Brig Pay on Retirement Rs 15,100 + RP 1,600 RE = PIPB of Rs 63,150 + GP of 8,900 + MSP 6000

Notional Pay Method Description Lt Col Brig

SAI 2/S/2008 5th CPC Scale: Rs 13500 – 400 – 17100 Rs 13,500 Rs 13,900 Rs 14,300 Rs 14,700 Rs 15,100 6th CPC Scale Rs 37,400 – 67,000 Rs 38,530 Rs 38,530 Rs 39,690 Rs 39,690 Rs 40,890

Notional Pay Method

Description Lt Col Brig Pay Fixed on Notional Basis on 1 Jan 2016 (7th CPC) 2.57 x (40890+8000) = Rs 1,25,647; Enhanced to Rs 1,28,500 (3rd Stage in DPM) 2.57 (63150+8900) = Rs 1,85,169; Enhanced to Rs 1,88,200(10th Stg) Pension by Notional Pay Method = 0.50 x (128500 + Rs 15500 of MSP) = Rs 72,000 0.50 x (188500+15500) =Rs 101600

2.57 Method Vs Notional Pay Method

Description Lt Col Brig Pension by 2.57 Method Rs 83,340 Rs 1,00,295 Pension By Notional Pay Method Rs 72,000 Rs 1,01,600 Pension Fixed w.e.f. Jan 2016 Rs 83,340 Rs 1,01,600 Better Method 2.57 Method Notional Pay Method (appears better for post – 2014 pensioners

Likely Loss to Officers By Incorrect Method of Notional Pay Method

• Armed Forces Pensioners sanctioned

OROP w.e.f. Jul 2014

• Civilians were NOT given OROP
• Notional Pay Method Adopted for

Civilians can NOT be applied to Armed Forces Pensioners

• All Armed Forces Personnel Irrespective

Date of Retirement are Deemed to have Notionally Retired in Calendar Year 2013

• The Notional Pay is to be Taken from Jul

2014 and NOT from Jan 2006

• Notional Pay of Brig in Jan 2006 = PIPB

+ GP = Rs 52,290 + 8,900 = Rs 61,190

• Pension = 0.50 x (PIPB +GP + MSP)
• PIBP + GP is called Matrix Pay and taken

for fixing Pension

• Notional Pay by OROP = 2 x 96555 –

MSP of Rs 6000 = Rs 66,240

Description Worked out DAD To be worked out PIPB + GP Rs 52,290 + 8,900 = Rs 61,190 = (2 x 96555) – 6000 = Rs 66,240 Matrix Pay in Dec 2015 = 2.57 x 61190 = Rs 1,57,258 = 2.57 x 66240 = Rs 1,87,110 Closest in Def Pay Matrix Rs 1,61,800 = Rs 1,87,700 Add MSP to get Notional Pay 161800+15500 = Rs 1,77,300 =187700+15500 =Rs 2,03,200

Description Worked out DAD To be correctly worked out Pension by Notional Pay Method = 0.50 x 177300 = Rs 88,650 =0.50 x 2,03,200 = Rs 1,01,600 Pension by 2.57 Method =37570 x 2.57 = Rs 96,555 =1,01,600 (gain is Rs 5,045 pm) 2.57 method appears to be better because

• f wrong method

Notional Pay Method is better

Rank QS in Years Pension in Dec 2015 PIPB + GP = (2 x Pension ) - MSP Closest to Def Pay Matrix DPM +15500 Pension by Notional Method = 0.50 x (DPM+15 500) Loss per Month Brig 33 96,555 1,87,110 1,87,700 2,03,200 1,01,600 5,045 31 to 32.5 95,810 1,85,620 1,87,700 2,03,200 1,01,600 5,790 30 95,797 1,85,594 1,87,700 2,03,200 1,01,600 5,803 28.5 to 29.5 93,612 1,81,224 1,82,200 1,97,700 98,850 5,238 20 82,214 1,58,428 1,61,800 1,77,300 88,650 6,436

Rank QS in Years Pension in Dec 2015 PIPB + GP = (2 x Pension ) - MSP Closest to Def Pay Matrix DPM +15500 Pension by Notional Method = 0.50 x (DPM+15 500) Loss per Month Maj Gen 33 99,621 1,93,242 1,93,800 2,09,300 1,04,650 5,029 20 82,214 1,58,428 1,62,300 1,77,800 88,900 6,686 Colonel 33 92,854 1,79,708 1,80,800 1,96,300 98,150 5,296 20 82,214 1,58,428 1,60,600 1,76,100 88,050 5,836 Lt Col 33 89,346 1,72,692 1,72,700 1,88,200 94,100 4,754 20 80,454 1,54,908 1,58,100 1,73,600 86,800 6,346 Major 33 61,205 1,16,410 1,18,100 1,33,600 66,800 5,595 20 55,332 1,04,664 1,05,000 1,20,500 60,250 4,918 Capt 33 43,716 81,432 82,400 97,900 48,950 5,234 20 38,828 71,655 73,200 88,700 44,350 5,522

Only AFT can get you Correct Pension by Notional Pay Method

Transiting from 3rd CPC to 7th CPC

Description Major Colonel Date of Retirement 26 May 1976 (3 CPC) 30 Apr 1988 (4 CPC) Qualifying Service 30 Yrs 06 Months 30 Yrs 2 Months Scale of Pay at the Time of Retirement Notional or Actual in 4th CPC Notional Pay Scale Rs 2300 – 100 – 3900 – 150 - 5100 + RP 600 Rs 2300 – 100 – 3900 – 150 - 5100 + RP 1000

Description Major Colonel

Pay on Retirement Notional : Rs 3,400 + RP of Rs 600 (Min Basic Pay is Rs 3,400 in Integrated Pay Scale) Rs 4,650 + RP of Rs 1,000

OROP Pension as

• n Jan 2016 Before

Revision

Rs 23,815 (Circular 555) Rs 36,130

Description Major Colonel Revised Pension as on Jan 2016 by 2.57 Method 23185 x 2.57 = Rs 61,205 Rs 36130 x 2.57 = Rs 92,855 Notional Pay Method of Pension

• Fixation. Pay Fixed
• n Notional Basis
• n 1 Jan 1996 (5th

CPC) Rs 11600 + RP

• f Rs 1200

Rs 15,100 + Rs 2000 (RP)

Description Major Colonel Notional Pay as in Jan 2006 (6th CPC) Rs 23,810 (PIPB) + Rs 6600 (GP) + Rs 6000 (MSP). Rs 40890 +8700+6000 Pay fixed on Notional basis as on Jan 2016 Rs 80,400 (in Def Pay Matrix) + 15,500 MSP Rs 1,30,600 + 15,500

Description Major Colonel Pension Fixed by Notional Pay Method as

• n Jan 2016

(7th CPC) 0.50 x (80400+15500) = Rs 47,950 0.50 x (130600+15500) = Rs 73,050 Pension by 2.57 Method Rs 61,205 Rs 92,855 Beneficial Method 2.57 Method 2.57 Method

MY PENSION HAS GONE UP BY 2.67 TIMES

No Sir You as Pre - 2016 Pensioner will continue to get your pension as

• n today at OROP x 2.57

till 30 Jun 2019.

Govt of India Enhanced Index of Rationalisaton from 2.57 to 2.67 to Brigs first and later to Lt Cols & Brigs

• Many have NOT understood the meaning of Index
• f Rationalisation (IOR).
• 7th CPC Recommended IOR for Lt Cols to Brigs at

2.57.

• IOR of 2.57 Resulted in Starting Pay (first cell) in

Defence Pay Matrix as on Jan 2016 of Lt Cols to Brigs less than their Counterparts in CAPFs

• Starting Pay in Jan 2016 = IOR x Entry Pay
• Govt of India on Representation from three

Service HQ improved IOR to Lt Cols and Brigs.

 IOR of 2.67 is Applicable to :-

• Serving Lt Cols to Brigs.
• Post – 2016 Pensioner Lt Cols to Brigs

EP IOR 2.57 IOR 2.67 Gain Lt Col 45,400 Pay in first cell in Def Pay Matrix as on Jan 2016 is 45400 x 2.57 = 1,16,700 Pay 45400 x 2.67 =1,21,300 Pay Rs 4,600 pm Pension Rs 2,300 pm

EP IOR 2.57 IOR 2.67 Gain

Col Rs 48,900 48900 x 2.57 = 1,25,700 45400 x 2.67 = Rs 1,30,600 Pay Rs 4,900 pm Pension Rs 2,450 pm Brig Rs 52,290 52290 x 2.57 = 1,34,400 52290 x 2.67 = Rs 1,39,700 Pay Rs 5,300 Pension Rs 2,650 pm

PENSION : LOSS TO ARMY CDRS BY 2.57 METHOD

2.57 Method (As worked out by CPPCs of Banks) Correct Method

Pension in Dec 2015 Rs 40,000 Rs 40,000 ( 50% of Pay of Army Cdr i.e. Rs 80,000) Pension in Jan 2016 by 2.57 Method = Rs 40,000 x 2.57 = Rs 1,02,800 = 0.50 x 225000 = Rs 1,12,500

Loss per Month

=112500 – 102800 = Rs 9,700 + DR

DISABILITY ELEMENT: LOSS TO ARMY CDRS

• Lt Gen YN Sharma, PVSM, AVSM, VSM former

Army Cdr, Central Comd is a war injured soldier

• f 1971 war.
• Granted 100% War Injury Element (WIE) and

Retained in Service after 1971 War

• Army Cdrs enjoyed OROP since the beginning
• His Pension in 6th CPC is 50% of Pay of Rs 80,000

in Dec 2015 i.e. Rs 40,000 + WIE being Retained in Service (60% of Reckonable Emoluments of Rs 80,000 i.e. Rs 48,000) + Constant Attendant Allowance of Rs 4,500 + Old Age Pension being 80 years plus

2.57 Method (As worked out by CPPCs of Banks) Correct Method

WIE as on Dec 2015

Rs 40,000 x 2 x 0.6 =Rs 48,000 Rs 48,000

WIE as on Jan 2016

= 48,000 x 2.57 = 1,23,360 =225000 x 0.6 = Rs 1,35,000

Loss

= 135000 – 123360

= Rs 11,640 + DR + 20%

• f Old Age Pension

Defence Pay Matrix

Salient Features of Defence Pay Matrix

• Pay in Pay Band and Grade Pay of 6th CPC

Merged as Matrix Pay

• MSP – Rs 15,500 pm
• For Pre – 2016 Pensioners:
• Pension in Jan 2016 = OROP Pension x 2.57
• Index of Rationalisation: Depends upon Degree of

Responsibilities and Accountability. Varies from 2.67 to 2.81

• Entry Pay. Same as for Civilians

Salient Features of Defence Pay Matrix

• Pay in First Cell = Entry Pay x Index of

Rationalization

• Number of Stages or Increments 40 upto Majors,

get reduced for Higher Ranks

• Army Cdrs Fixed Pay of Rs 2,25,000 pm
• Service Chief Fixed Pay of Rs 2,50,000 pm
• Increment @ 3% - Every January or July
• On Promotion gets one increment in present rank

& Pay fixed in Hihger Rank with Pay higher than previous rank + one increment

Rank No of Stages Upto Majors 40 Lt Col 20 Col 18 Brig 16 Maj Gen 15 Lt Gen (75,500 – 80000) - 4 (67,000 – 79,000) - 8 Army Cdr / Service Chief 1

Defence Pay Matrix

Lt Capt Major Lt Col Col

Entry Pay 21,000 22,960 25,980 45,400 48,900 IOR 2.67 2.67 2.67 2.67 2.67 1 (Jan 16) 56,100 61,300 69,400 1,16,700 1,25,700 2 57,800 63,100 71,500 1,20,200 1,29,500 3 59,500 65,000 73,600 1,23,800 1,33,400 4 61,300 67,000 75,800 1,27,500 1,37,400 5 63,100 69,000 78,100 1,31,300 1,41,500 Last 1,10,700 1,20,900 1,36,900 2,10,700 2,14,400

Brig Maj Gen Lt Gen (HAG) Lt Gen (HAG+) Army Cdr Entry Pay 52,290 53,300 67,000 75,500 IOR 2.67 2.67 2.67 2.67 2.81 1 (Jan 16) 1,39,600 1,44,200 1,82,200 2,05,400 2,25,000 2 1,43,800 1,48,500 1,87,700 2,11,600 3 1,48,100 1,53,000 1,93,300 2,17,400 4 1,52,500 1,57,600 1,99,100 2,24,400 5 1,57,100 1,62,300 2,05,100 Last 2,17,600 2,18,200 2,24,100

Analysis of Defence Pay Matrix

• Entry Pay for Armed Forces Personnel fixed on

similar lines of Civilians

• In Civil Cadre, they have two ways of becoming
• fficers
• One is Direct Recruits through UPSC Exam like

IAS / IPS / IFS / IRS etc

• Other is through Departmental Promotions
• Entry Pay is Fixed based on the Number of Years

taken by Departmental Candidates to become Officers

Observation of Defence Pay Matrix

• In Armed Forces JCOs /OR do NOT Get promoted

the way it is done in Civil Services

• Even SL Officers, SCOs and RCOs have to

undergo the same selection procedure i.e. SSB, Training in IMA /OTA/ Unit duties

• What is applicable can not be applied to Armed

Forces Officers

• Capt to Col and Maj Gens will get Less Pay as on

Jan 2016 and Less Pension for Post – 2016 Pensioners & OROP beneficiires w.e.f. Jul 2019

Observation of Defence Pay Matrix

• For Lt, Brig and Lt Gen the Entry Pay is Minimum

Pay in SAI 2 / S / 2008 ( 6th CPC)

• These Three Ranks do not suffer any Loss of Pay

/ Pension

• Majors are the worst affected in 7th CPC. Their

Pay w.e.f.5th CPC has been lowered (Rs 11,950 -> 11,600). Pay in subsequent CPC based on Rs 11,600 pm.

Loss of Pay to Serving Armed Forces Officers in 7th CPC

Rank IOR EP Min Pay in 6th CPC Pay by Def Pay Matrix Pay as Min Pay

• f Rank

Lt 2.67 21,000 21,000 56,100 56,100 Capt 2.67 22,960 24,700 61,300 66,000 Major 2.67 25,980 30,410 69,400 81,200 Lt Col 2.67 45,400 46,530 1,16,700 1,24,300 Col 2.67 48,900 49,590 1,25,700 1,32,405

Rank IOR EP Min Pay in 6th CPC Pay in Jan 2016 by Def Pay Matrix Pay as Min Pay of Rank in Jan 2016

Brig 2.67 52,290 52,290 1,39,600 1,39,600 Maj Gen 2.72 53,300 54,700 1,44,200 1,48,800 Lt Gen (HAG) 2.72 67,000 67,000 1,82,200 1,82,200 Lt Gen (HAG+) 2.72 75,500 75,500 2,05,400 2,05,400

LOSS PER MONTH

Rank 2016 2017 2018 2019 2020 2021 2025 Capt 4,700 4,900 5,100 5,300 5,500 5,700 6,500 Major 11,800 12,200 12,600 13,000 13,400 13,900 15,900 Lt Col 7,600 7,900 8,200 8,500 8,800 9,100 10,300 Col 6,705 7,000 7,300 7,600 7,900 8,200 9,400 Maj Gen 3,784 3,898 4,014 4,135 4,259 4,387 4,518

LOSS PER YEAR

2016 2017 2018 2019 2020 2021 2025 Maj Gen 45,408 46,770 48,173 49,619 51,107 52,640 24,000 Col 80,460 84,000 87,600 91,200 94,800 98,400 1,12,800 Lt Col 91,200 94,800 98,400 1,02,000 1,05,600 1,09,200 1,23,600 Maj 1,41,600 1,46,400 1,51,200 1,56,000 1,60,800 1,66,800 1,90,800 Capt 56,400 58,800 61,200 63,600 66,000 68,400 78,000

This is not a One Time

• Loss. This loss will be

Compounded in every future CPCs as Pay & Pensions are Dependent upon Previous CPC

Only AFT can get you Correct Pension by Notional Pay Method

Thank you so much for your patient Hearing